Denver-Greeley Valley Water Users Ass'n v. McNeil

• Decision Date: 17 November 1942
• Docket Number: No. 2489.,2489.
• Citation: 131 F.2d 67
• Parties: DENVER-GREELEY VALLEY WATER USERS ASS'N et al. v. McNEIL et al.
• Court: U.S. Court of Appeals — Tenth Circuit

131 F.2d 67 (1942)

DENVER-GREELEY VALLEY WATER USERS ASS'N et al. v. McNEIL et al.

No. 2489.

Circuit Court of Appeals, Tenth Circuit.

August 24, 1942.

Petition for Rehearing Withdrawn November 17, 1942.

Reid Williams, of Denver, Colo. (J. Donovan Stapp, of Denver, Colo., on the brief), for appellants.

Albert L. Vogl, of Denver, Colo. (Carle Whitehead and Frank A. Wachob, both of Denver, Colo., on the brief), for appellees.

Before BRATTON and HUXMAN, Circuit Judges, and SAVAGE, District Judge.

SAVAGE, District Judge.

This case is before the court for the fourth time. The first appeal resulted in affirmance of a judgment for John McNeil, Winthrop L. Fay and Marion E. Plouff¹ against the Denver-Greeley Valley Irrigation District² for the amount due them on bonds and interest coupons issued by the irrigation district, with the qualification that the judgment be enforced in accordance with the law of Colorado. It was observed in the opinion of the court that under the law of Colorado the judgment could be collected only out of a special fund created by the levy of special assessments against the land situated in the irrigation district. Denver-Greeley Valley Irrigation District v. McNeil, 10 Cir., 80 F.2d 929.

Special assessments had been timely levied sufficient in amount to produce a fund for the payment of the principal of the bonds and all interest coupons, except the coupons maturing during the years 1913 to 1919 inclusive, if all taxes had been paid. After the judgment became final, levies were made in 1936 against certain lands in the irrigation district sufficient in the aggregate to produce a fund for payment of interest coupons maturing during the years 1913 to 1919 inclusive if the special assessments had been paid. But in making these levies the assessors and county commissioners of Weld and Adams counties omitted about 20,000 acres of land which was included in the irrigation district in 1909 when the bonds were issued. The bondholders instituted an ancillary mandamus action seeking to require the making of a levy against the omitted land for the purpose of raising a fund for payment of their judgment. On appeal this court held that a writ of mandamus should issue to require a levy on all lands within the irrigation district as of the date upon which the bonds and coupons issued sufficient in amount to produce a fund for payment in full of that part of the judgment in the original case which represented recovery on the interest coupons maturing in the years 1913 to 1919 inclusive. Denver-Greeley Valley Irrigation District v. McNeil, 10 Cir., 106 F.2d 288.

An order was entered by the trial court in conformity with the mandate of this court. The county officers and the officers of the irrigation district in compliance with the order of the court caused seven separate levies to be made in 1939. The lands upon which the special assessments were delinquent were sold for taxes in 1940. Tax sale certificates were issued to the irrigation district.

In February, 1941, an order was made by the trial court directing the officers of the irrigation district to pay to the clerk of the court all money realized from the 1939 levies and to assign and deliver to the clerk of the court all tax sale certificates resulting from such levies for the benefit of the judgment creditors. An appeal from the order was taken to this court. The appeal was dismissed in June of 1941, and the order of the trial court was complied with.

On April 16, 1941, certain owners of land in the irrigation district and the Denver-Greeley Valley Water Users Association, acting through their attorney, David J. Miller, filed an action in the district court of Weld County, State of Colorado, against Harvey E. Witwer, county treasurer of Weld County, and ex officio treasurer of the irrigation district, H. L. Prather, county treasurer of Adams County, and the bondholders. The plaintiffs pray for judgment as follows:

1. Directing the treasurers of Weld and Adams counties to accept interest coupons maturing during the years 1913 to 1919 inclusive in payment of the special assessments levied in 1939.

2. Determining whether the defendant bondholders are entitled to have a levy of execution against assets of the district.

3. Declaring the tax sale certificates issued because of non-payment of special assessments levied in 1939 null and void.

4. Declaring tax sale certificates issued for non-payment of special assessments levied in 1939 on lands previously excluded from the irrigation district null and void.

5. Declaring the rights and liabilities of the parties with reference to bonds and coupons of the irrigation district.

On October 1, 1941, the trial court, upon motion filed in the original case by the bondholders, issued an order directing the appellants to show cause why they should not be punished for contempt by reason of their action in filing and prosecuting the suit in the state court. In such motion the bondholders recited the history of the litigation and alleged that appellants had conspired together to maintain the action in the state court for the purpose of circumventing and obstructing the jurisdiction of the federal court and nullifying its judgments; that the appellants are in contempt of court and, if not punished for such contempt, will by further prosecution of the suit in the state court nullify its orders, judgments and decrees by requiring the treasurers of Weld and Adams counties to accept worthless interest coupons in redemption of the tax sale certificates now held in the registry of the court; and that appellants by their contemptuous conduct had caused the bondholders to expend sums of money in defending the suit in the state court.

The appellants in their reply to the motion to show cause admitted all the facts alleged in the motion but denied that they were in contempt of court or had violated any judgment, order or decree of the court in filing and prosecuting the suit in the state court. They further controverted the claim of the bondholders for damages.

At the hearing on the order to show cause, the court heard evidence only on the question of damages. An order was entered finding the appellants in contempt of court; assessing damages against them in the amount of $560.96; and restraining the appellants from proceeding in the state court suit other than to dismiss the action with prejudice.

It is urged by appellants that the trial court committed error in adjudging them in contempt and in enjoining them from the further prosecution of the suit in the state court.

It is well settled that disobedience of any lawful and valid judgment, decree or order of a court acting within its jurisdiction of which one has notice or actual knowledge constitutes contempt of court. It is equally well settled that it is contempt of court to interfere with property which is in custodia legis. But in determining in contempt proceedings whether an order, judgment or decree of a court has been violated, such order, judgment or decree will not be expanded by implication beyond the meaning of its terms when considered in the light of the issues and the purpose for which the suit was brought. 12 Am.Jur., 404-406; Terminal Railroad Association of St. Louis v. United States et al, 266 U.S. 17, 45 S.Ct. 5, 69 L.Ed. 150.

The federal courts are granted authority to punish for contempt by Section 268 of the Judicial Code, 28 U.S.C.A. § 385. Such power is limited to cases involving the misbehaviour of any person in the presence of the court or so near thereto as to obstruct the administration of justice, the misbehaviour of any officers of the courts in their official transactions and the disobedience or resistance of any person to any lawful writ, process, order, rule, decree or command of the courts. The recent case of Nye et al v. United States, et al., 313 U.S. 33, 61 S.Ct. 810, 85 L.Ed. 1172, is not controlling because the question there under consideration was whether the misbehaviour complained of was in the presence of the court or so near thereto as to obstruct the administration of justice. However, it was there pointed out that it is intended by Section 268 to limit the power of the courts to punish for contempt. The obvious inference to be drawn from the case is that authority of the courts to punish for contempt should not be extended beyond the plain terms of the statute.

The trial court found that the filing and prosecution of the suit in the state court interfered with the processes of the court in the enforcement and collection of its judgment; that the suit was instituted for the purpose of interfering with the enforcement and collection of such judgment; and that such suit would create conflict and confusion in the collection of the judgment and enforcement of the orders of the court. The court concluded that appellants were guilty of contempt in filing the suit in the state court for the purpose of having that court issue orders, judgments and decrees which would conflict with its judgment, orders, mandates, decrees and processes.

In the original suit a qualified judgment was entered in favor of the bondholders against the irrigation district. Subsequently, the court issued a writ of mandamus commanding the proper county officers and the officers of the irrigation district to levy special assessments on all lands within the irrigation district. This command of the court was obeyed. Thereafter the court ordered the officers of the irrigation district to pay into the registry of the court all money received in payment of special assessments and to assign and deliver to the clerk of the court the tax sale certificates which came into existence as a consequence of the levy of such special assessments. This order of the court was likewise complied with in all respects. It thus appears that there has been no resistance to any order or decree entered by the court. Disobedience could only result from either a failure...